Mortgage advisers were today criticised by Which?, the consumer magazine, for providing poor standards of service.

Its report said that just three out of 39 mortgage advisers it went to gave acceptable advice to researchers posing as first-time buyers.

It said 21 advisers, including people at high street banks, building societies, estate agents and independent advisers, failed to properly explain the ways to repay a mortgage, while 23 did not clarify the different deals available.

The group said despite the Mortgage Code being in place to protect consumers from being given bad advice, seven of the advisers did not even mention it, while 14 gave misleading information about it.

It said some advisers working for big high street names failed to make it clear that they could only sell mortgages offered by their own company, although the Mortgage Code says they must make sure consumers know this.

It added that while some independent advisers made a big deal about the fact that they could search the entire market for mortgages, they were less vocal about the fact that they could only sell mortgage protection insurance from one company.

Some advisers even concentrated more on selling protection insurance, on which they earn commission, than on giving mortgage advice.

From the beginning of November this year mortgage advisers will become regulated by City watchdog the Financial Services Authority, but Which? said this was unlikely to solve all the problems it encountered.

Malcolm Coles, editor of Which?, said: "Some of the bad advice we received was down to inexperience and poor training, or advisers being more concerned about selling protection insurance that pays big commissions than giving mortgage advice.

"Regulation won't solve these problems, though it should mean advisers become more accountable.

"Bad mortgage advice can cost you thousands of pounds or, even worse, your home. Consumers deserve better. We'll be keeping an eye on the situation."

But NatWest said the Which? findings were not consistent with its own internal research, and added that it had recently put all its advisers through extensive retraining in anticipation of the forthcoming mortgage regulation.

HSBC said explaining that it could only sell its own mortgages was one of the steps its advisers had to go through with customers.

Halifax added that people taking out a mortgage were taken through a very structured process in which they were told about the Mortgage Code, the different types of loan available and different interest rates.

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